The significant challenges for local government in 2008 were set out in a speech by Communities Minister Hazel Blears. The key issues are transferring power from Whitehall to the town hall and beyond and driving forward community contracts.

The new approach to regeneration with the Working Neighbourhoods Fund is designed to help councils to think creatively about how they might help places dogged by long-term worklessness and turn them around.

Relaxing the grip of Whitehall has raised the importance of local area agreements and given councils the opportunity to focus on targets that make a real difference on the priorities people care about. Part of this challenge is to use the new duty to cooperate and strengthen the council’s role as the people who hold the ring of local accountability by deepening partnerships with Primary Care Trusts, Police Authorities, and Education Authorities.

Keeping up the momentum on devolution to the doorstep will be a major challenge. Developing community contracts will play a major role because they will bring together local people councils, police, and health authorities to agree what each will do to make the neighbourhood better. The Community Kitty pilots are developing ways of progressing participatory budgeting and it is hoped that this will be another way in which power can be moved downwards.

The local government scene is changing rapidly and councils will exhaust the limits of the current framework. Hazel Blears wants to know when this happens and what can be done to extend the framework.